On Monday, The Colorado Sun published a months-long investigative report on the rate of home foreclosures initiated by Homeowner Associations. If you haven’t read it yet, you should. The findings are appalling.
To quickly summarize, since 2018 more than 250 homes were found to have been legally seized and resold by HOAs in Colorado. Sometimes these foreclosures were over infractions that amounted to as little as a couple of thousands of dollars in unpaid HOA dues.
Adding insult to injury, the foreclosed homes were then sold off at auctions, typically for a fraction of their market value. Frequently the homes were then resold at full profit weeks to months later by real estate investors who bought them.
If this real estate practice sounds sketchy, it is. Yet according to current state law, such shady dealings are not only perfectly legal, they’re actively lobbied for and maintained as law by HOA and property management lobbyists. So much for a government of the people, by the people, for the people.
In an era where billionaires and corporations continue to unscrupulously buy their way to the top, it’s hardly surprising to learn about yet another way regular people are getting screwed out of their hard-earned money. Some days it feels like it’s all we can do to keep going, knowing the system is so rigged against us.
But for a moment, let’s set aside the incredibly obvious fact that state lawmakers should do their job by limiting HOA power and focus on what HOAs foreclosing on homeowners really means: Neighbors are voting to foreclose on neighbors.
To back up for a minute, it’s important to appreciate that HOAs are generally made up of a board of homeowners in the community who volunteer their time to make decisions about community maintenance. In theory, this means that neighbors are working together to keep their community in good standing. Sounds great, right? Who doesn’t like snow-plowed streets and higher market values?
In practice, HOAs are a nightmare. To paraphrase a friend, think about who has the amount of time and energy to join a volunteer board that oversees whether or not private citizens have the right shade of beige painted on their fence, or whether or not their Christmas lights are up too early or late. Now ask yourself if you really want that person to have so much authority over your property and life. Probably not.
But that’s exactly what’s happening. While there are a handful of people on HOA boards who mean well, there are also the curmudgeons and busybodies who just can’t help themselves from crossing the line. And the moment one of those people is elected to an HOA board, either by default or unknowingly, the entire community is put at risk.
This is exactly what’s happening when an HOA forecloses on one of its own. No law requires board members to mandate the pursuit of foreclosure on a neighbor. No, it’s just a series of bad actors on a power trip who have decided that instead of finding a way to help out a neighbor in trouble, they now have some unearned sense of entitlement to enforce authority on them instead. In the end, the entire community — most especially the homeowner being foreclosed on — gets hurt.
It’s this lack of neighborly conduct that should bother us most. If rich entitlement is taking over America, so, too, is a general sense of selfishness among us mere mortals. That some people care more about what type of lawn ornament is or isn’t allowed over the person who puts out the lawn art is proof of this imbalance. Have we really become so self-focused that we’d rather steal a neighbor’s home than help them pay back a few thousand bucks of unpaid HOA dues, especially when those dues are ethically dubious to begin with?
Call me crazy, but I grew up in small-town America where neighbors are taught to help each other, not kick ‘em when they’re down. And maybe it’s true that we’re all just fighting our way in a corrupt system, but how does taking it out on each other help?
So Colorado lawmakers, do your thing. Reject the powerful HOA and property management lobbies that seek to control you, and change the laws to protect regular people from corporate interests and bad actors.
But HOA board members, this is on you, too. Don’t be the jerks that steal your neighbor’s home. They might be behind on their bills, but I promise that initiating actions to take away their home makes you the biggest loser.
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